Finland welcomes EU agreement on Russian log export duties

Finland’s timber industry has welcomed the resolution of the long-running dispute on Russian log export duties.

The Finnish Forest Industries Federation (FFIF) said the agreement reached yesterday on the issue between Russia and the EU, in order to smooth Russia’s entry to the World Trade Organisation, would lead to Russian softwood log duties halving.

Russian deputy prime minister Igor Shuvalov said Russia would phase out the duties on its log exports once it joins the WTO, now expected in 2011. The announcement in Brussels came days after he signalled Russia’s willingness to compromise on the duties – a move backed by President Medvedev.

“Russia's timber duty decision is a positive result from the perspective of the Finnish forest industry,” said FFIF director-general Timo Jaatinen.

“According to the information available at the moment, effects of the duties will not focus on timber grades, which are imported into Finland, as heavily as before. Russian export duties on hardwood will decrease to a quarter of the current level. Duties on softwood will decrease by half.

“The Finnish forest industry has, however, already adjusted its operations to reduced timber imports from Russia and relies on domestic raw materials to a very large extent.

“A recovery in Russian timber imports is now dependent on developments in forest industry exports and the cost competitiveness of both domestic and Russian timber.”

Mr Jaatinen said co-operation between the forest sectors of Russia and Finland was in the best interests of both countries in the long term.

“From the perspective of investments, the most critical issues are the removal of all business-negative export duties and trade barriers, a focus on the development of infrastructure as well as the establishment of sufficient guarantees to the continued and reliable supply of wood raw materials for decades to come.”

Finland’s forest industry has so far invested more than €1bn into Russia. Its investments have targeted the sawmill and panel industries as well as the paperboard industry.